Microsoft disabling certain offline capabilities of modded consoles still isn't a lawsuit-worthy offense. The entire device and all the functionality contained therein is their baby, not yours, until you mod it. Then it becomes your baby entirely. Want to save games to the console's HDD? Write a patch to make it happen. Want to get your Netflix streaming working again? Write the code for it. You still have ALL of this capability, but Microsoft simply isn't going to let you use the functionality they built in - if you want to mod the console, then you get to figure out how to make those things work all by yourself.

Is that petty? Absolutely. Is it illegal? Not a chance. Illegal would be fining you for modifying the hardware, or somehow permanently disabling ALL functionality remotely such that you couldn't even turn it on.

Also, there has to be a line drawn somewhere on the "EULAs are legally binding contracts" vs. "EULAs are just junk and not binding in any way, shape, or form" argument. You can't sign away your civil rights by agreeing to an EULA, but at the same time, a company has to be allowed to set forth conditions upon which their services depend. To say that the EULA shouldn't be binding, even though it explicitly states that you are not entitled to using a modded console on their network, is to say that Microsoft should have absolutely no say in how their network is used. That would mean that they'd have to allow modded Wiis, Playstations, heck, even iPhones... to use their service in its entirety. They have zero obligation to allow this. Short of making you sign a full-blown, notarized contract before you are allowed to use XBox Live, the EULA is their only method of making you aware of their terms of service and thus having something to back their decisions in regards to denial of service.

You're not entitled to anything by the copper and plastic that makes up the console. What you do with it is your decision, but allowing you to use Microsoft's services or perks is solely at their discretion.

Great point, except that the brain -doesn't- learn everything by imitation, it learns it by simple cause and effect at first, with reasoning following soon after. The language example was a good one, except that the brain initially has to make the decision that learning the language is necessary. An infant would never learn to talk if, for some reason, it never thought, "hey, these people make noises toward one another, and get what they want, make things happen. I should make those noises!"
Then the imitation kicks in.

The water example was poor simply because, well, you're brain screams for water when you are dehydrated, because it knows you'll die without it, so it doesn't care if other people are drinking water.

The berry idea is more of a "passed down knowledge" issue. It seems to me that the more likely scenario would be along the lines of, "no one else eats these berries, but they look really good. Oh well, their loss," assuming there as no interference or guidance from another person.

In regards to games, it seems to me that the brain's reasoning capabilities are what cause us to refrain from imitating what we see. The brain is smart enough to realize that the game isn't real, and performing the in-game acts in real life on real people is not going to bring about the same result as it did in the game.